The main annual obligations for companies in Germany
German companies must fulfil a variety of obligations under the German Commercial Code (Handelsgesetzbuch – HGB) and the Limited Liability Companies Act (GmbH-Gesetz). The Ecovis consultants explain these in detail.
German companies, whether limited liability (GmbH) or public limited (AG), are required annually to comply with the legal obligations established by these laws. When managed with professional guidance and supervision, these obligations ensure orderly compliance and promote transparency and sound corporate governance.
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Preparation of annual accounts:
Managing directors must prepare the annual financial statements (balance sheet, profit and loss account, and, where applicable, notes and management report) within three to six months after the end of the financial year. The accounts must give a true and fair view of the company’s financial position.
Approval by shareholders:
The annual accounts must be submitted to the shareholders’ meeting for approval (Feststellung) within six months after the year-end. At this meeting, shareholders also decide on the allocation of profits and the discharge (Entlastung) of the managing directors.
Filing with the Federal Gazette (Bundesanzeiger):
Once approved, the annual accounts must be filed electronically with the Federal Gazette within twelve months after the balance sheet date (normally by 31 December of the following year if the financial year ends on 31 December). The extent of disclosure depends on the size of the company, with small companies benefiting from simplified reporting requirements. Failure to file can result in penalties of up to EUR 25,000.
Bookkeeping and record retention:
Companies must maintain proper accounting records and retain financial documents for at least ten years. Commercial correspondence and supporting documents must be kept for at least six years.
Audit obligations:
An external audit is mandatory if the company exceeds two of the following three thresholds in two consecutive financial years:
- Total assets exceeding 6,000,000 €
- Annual turnover exceeding 12,000,000 €
- Average number of employees exceeding 50
Auditors must be officially appointed and registered when these criteria are met.
Annual Shareholders’ Meeting:
Companies must hold at least one annual shareholders’ meeting (Gesellschafterversammlung) to approve the annual accounts, decide on profit distribution, discharge the management, and pass other necessary resolutions.
Changes and updates:
Any corporate changes — such as the appointment or resignation of managing directors, amendments to the articles of association, relocation of the registered office, or changes in share capital — must be notarized and filed with the Commercial Register. These filings ensure that the public record remains up to date.
